Monday, October 15, 2007
Owning a property is great. My husband and I bought our first home over six years ago and were absolutely thrilled when we picked up the keys. Finally, the money we were spending on accommodation each month would be used to pay our mortgage, not a landlord's.
Of course, owning a property isn't without its drawbacks. So far we've had to shell out for a new kitchen, bathroom, carpets and roof maintenance! But it's all part and parcel of being a home-owner.
Our mortgage, as for most people, is our biggest bill and eats up a fair chunk of our income each month. And although we were DINKYs (Double Income No Kids Yet!) when we moved in, we have since had a daughter - which has been an eye opener in many ways, not least financially! It's amazing how someone so small and cute can cost so much.
Luckily we were warned of this and decided to start economising even before she was born. By attacking our bills we soon managed to reduce our outgoings by quite a bit. And when we knew the discounted rate on our mortgage was due to end, we zeroed in on it. We gave ourselves three months to find a best buy deal, take it out and get switched over.
Finding a new mortgage deal
The first thing we did was check out the national newspapers for the cheapest fixed rate mortgages available at the time. Armed with this information, we called our lender. Apart from making our lives easier, sticking with the same lender would mean not having to pay an arrangement fee (which can be anything up to £3k these days!) or at the very least a much reduced one, so we'd all win.
Unfortunately, this wasn't to be; the deal we were offered was far more expensive than others on the market. So we said "no thanks" and started looking elsewhere. We then spent a week or so calling up some of the lenders offering the best buy mortgages in the newspapers, eventually found one suitable for us and applied. And when our mortgage deal expired, we transferred onto the new deal.
And re-mortgaging certainly saved us money. Our mortgage rate was 4.59% APR - once this ended we were due to pay our lender's Standard Variable Rate (SVR) of 6.75% APR. This meant our payments would have increased by nearly £200 per month, which I can assure you would have been extremely painful. Instead we found a fixed rate deal at 4.39%, which meant our payments actually reduced by a few pounds each month. Fantastic.
This was a few years ago now and we've moved house and remortgaged since. Second time around was easier due to our discovery of the mortgage broker.
We realised that a good, fee-free,whole of market mortgage broker could scour the market for the best deals for our circumstances, saving us valuable time (while importantly, not costing us anything).
What's more, as brokers often have access to deals that aren't available to individuals, they can even save you money, too. We used The Motley Fool Mortgage Service the last time we re-mortgaged and were honestly very impressed with the service.
Not only were we in the position to choose the product we preferred from two recommended in just two days, the subsequent remortgage was sorted out very quickly too. And as you've probably guessed, I did some serious checking myself to ensure the deals we had been recommended were the best on the market for us, and they genuinely were.
So I think I can safely say that when we next remortgage, we won't be relying on old-fashioned newspapers. We'll be making use of mortgage brokers once again. After all, free time is precious and I'd rather spend it with my family than chasing lenders!
Source: http://www.fool.co.uk/news/property-home/mortgages/
2007/10/09/how-remortgaging-saved-me-money.aspx
